Our Comments and Expectations
External backdrop. The S&P 500 rose by 0.4% yesterday and managed to close at record highs. Today, markets expect the Fed to keep interest rates unchanged, shifting most attention to Powell’s speech following the decision. In addition, after the market close, companies from the “Magnificent Seven” will report earnings: Tesla investors will focus on updates in autonomous driving and robotics technologies; Meta may report results near the upper end of its guidance; Microsoft is expected to announce 15% sales growth. Early this morning, it was reported that ASML’s profits exceeded expectations and order volumes came in well above consensus forecasts, which could lift investor sentiment in the semiconductor sector. Meanwhile, U.S. consumer confidence fell in January to its lowest level since May 2014 amid more pessimistic expectations for the economy and the labor market. The U.S. dollar weakened further after Trump stated that he is not concerned about its decline. Oil prices jumped by 3% and are trading around $66.6 this morning. S&P 500 futures are currently up 0.4%.
KASE Index. The KASE Index closed neutral yesterday; however, investors’ attention today will be more focused on the current session. As in previous sessions, the main price action took place on foreign exchanges.
Index stocks. Kazatomprom continues its powerful rally: GDR prices rose another 5.5%, while uranium prices surged 7.5%, pushing the nearest futures contract above $90. There was no single clear trigger in the market; most likely, growing investor confidence in the future of the radioactive metal was driven by several factors at once: first, uranium is in high demand both as fuel for the growing needs of AI and as an investment asset; second, Trump voiced support for nuclear energy in Davos, emphasizing its key role in energy security and clean energy supply;
third, the weaker dollar provided support to all commodities. Among individual updates, it is worth noting a target price increase for one of the sector leaders, Energy Fuels. It should be noted that the average analyst estimate for Kazatomprom still points to a negative upside of −13%, but many of these estimates are becoming outdated amid rising prices. The latest update from BOC International sets a target price of $108. The second-strongest performers were Halyk Bank GDRs, which unexpectedly jumped 4.2%, broke through the $30 resistance level, and set new all-time highs. A positive but illiquid move was also observed in Air Astana depositary receipts. Thanks to these three stocks on foreign exchanges, the KASE Index is up 1.6% from the opening today.
Currency. On the USDKZT chart, today shows a battle between bulls and bears amid rising oil prices and a weaker dollar globally. Initially, the dollar rebounded from the 502 tenge level and rose toward 505 tenge, but then declined to 500.5. At the time of writing, the pair is trading near the previous close, around 503.5 tenge.